LONDON -- Prezzo (LSE: PRZ.L ) remained flat at 68 pence in early London trading after the restaurant chain published its first-half results.
The AIM-quoted firm said sales had improved 14% to 68 million pounds and adjusted pre-tax profits had advanced 4% to 7.6 million pounds. The performance was underpinned by the opening of 12 new restaurants, including outlets at London Kings Cross railway station, Cobham, Crawley, Sevenoaks, and Southport.
Prezzo currently operates 194 restaurants, with the remainder of the year likely to see the estate top 200 locations as further outlets are opened in Bath, Bristol, and Manchester.
As in previous years, an interim dividend was not declared.
Summing up the performance, Michael Carlton, Prezzo's chairman, said:
It would be fair to say that 2012, with its Royal Diamond Jubilee celebrations and an extremely successful Olympic Games In London, has been somewhat atypical and greater peaks and troughs in trading have presented both opportunities and challenges for restaurant operators.
The business has performed well over the summer months and while we have not seen any evidence of a sustained economic recovery, the Board remains confident of delivering further progress over the remainder of the year.
Right now, Prezzo's 157 million pound market cap values the group at about 12 times forecast earnings for 2012. The rating falls to 11 for 2013, which does not look too demanding given the group's upbeat expansion plans.
Indeed, today's statement from Prezzo emphasizes how dynamic growth businesses can become wonderful investments for ordinary investors.
Back in 2003, Prezzo reported annual sales of 4 million pounds and a small operating loss as it expanded from four to 15 restaurants. The shares at the time traded as low as 5.6 pence.
The "rollout" of the group's Italian dining format has since driven the share price up 12-fold, equivalent to an annual compound gain of about 30%. Such returns suggest it may pay to keep an eye on Prezzo.
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